ISSN 0542-5492 Second Session - Thirty-Second Legislature of the Legislative Assembly of Manitoba STANDING COMMITTEE on AGRICULTURE 31-32 Elizabeth 11 Chairman Mr. A. Anstett Constituency of Springfield VOL. XXXI No. 10 - 1: 00 p.m., MONDAY, 25 AP RIL, 19 83.

MANITOBA LEGISLATIVE ASSEMBLY Thirty-Second Legislature Members, Constituencies and Political Affiliation Name ADAM, Hon. A.R. {Pete) ANSTETT, Andy ASHTON, Steve BANMAN, Robert {Bob) BLAKE, David R. (Dave) BROWN, Arnold BUCKLASCHUK, John M. CARROLL, Q.C., Henry N. CORRIN, Brian COWAN, Hon. Jay DESJARDINS, Hon. Laurent DODICK, Doreen DOERN, Russell DOLIN, Mary Beth DOWNEV, James E. DRIEDGER, Albert ENNS, Harry EVANS, Hon. Leonard S. EYLER, Phil FILMON, Gary FOX, Peter GOURLAV, D.M. {Doug) GRAHAM, Harry HAMMOND, Gerrie HARAPIAK, Harry M. HARPER, Elijah HEMPHILL, Hon. Maureen HYDE, Ll oyd JOHNSTON, J.

Frank KOSTYRA, Hon. Eugene KOV NATS, Abe LECUYER, Gerard LYON, Q.C., Hon. Sterling MACKLING, Q.C., Hon. AI MALINOWSKI, Donald M. MANNESS, Clayton McKENZIE, J. Wally MERCIER, Q.C., G.W.J. {Gerry) NORDMAN, Rurik (Ric) OLESON, Charlotte ORCHARD, Donald PAWLEV, Q.C., Hon. Howard R. PARASIUK, Hon. Wilson PENNER, Q.C., Hon. Roland PHILLIPS, Myrna A. PLOHMAN, John RANSOM, A. Brian SANTOS, Conrad SCHROEDER, Hon. Vie SCOTT, Don SHERMAN, L.R. {Bud) SMITH, Hon. Muriel STEEN, Warren STORIE, Jerry T. URUSKI, Hon. Bill USKIW, Hon. Samuel WALDING, Hon. D. James Constituency Ste.

Rose Springfield Thompson La Verendrye Mi nnedosa Rhineland Gimli Brandon West Ellice Churchill St. Boniface Riel Elmwood Kildonan Arthur Emerson Lakeside Brandon East River East Tuxedo Concordia Swan River Vir den Kirkfield Park The Pas Rupertsland Logan Portage la Prairie Sturgeon Creek Seven Oaks Niakwa Radisson Charleswood St. James St. Johns Morris Roblin- Russell St. Norbert Assiniboia Glad stone Pembina Selkirk Transcona Fort Rouge Wolseley Dauphin Turtle Mountain Burrows Rossmere lnks ter Fort Garry Os borne River Heights Flin Flon lnt erlake Lac du Bonnet St.

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LEGISLATIVE ASSEMBLY OF MANITOBA THE STANDING COMMITTEE ON AGRICULTURE Monday, 25 April, 1983 TIME - 1:00 p.m. LOCATION - Morden, Manitoba CHAIRMAN - Mr. Andy Anstett (Spri ngfield) ATTENDANCE - QUORUM - 6 Members of the Committee present: Hon. Messrs. Adam, Bucklasc huk, Plohman, Uruski and Uskiw. Messrs. Anstett, Carrell, Downey, Gourla y, Manness, Orchard. WITNESSES: Mr. Don McE wan, Private Citizen; Messrs. Sp encer and Zettler, Conc erned Farmers from the Portage area; Mr. Don Alexand er, Private Citizen; Me ssrs. Bill Strath and Ray Siemans, Manitoba Pool Elevators; Mr.

Paul Klassen, Pembina NDP Association; Mr . Tom Je nsen , Ma nitoba Trucking Association. MATTERS UNDER DISCUSSION: Western Transportation Initiative proposed by the Government of Canada. MR. CHAIRMAN: We're awaiting a couple of members, but I don't think we should wait any longer, so we'll., begin our proceedings. Before we begin, I would like to introduce those members who are here. Starting on my far left: Mr. Doug Gourlay, the Member for Swan River; beside Doug, Mr.

Jim Downey, the Member for Arthur; beside Jim, Clayton Manness, the Member for Morris; your local MLA for the Town of Morden and the constituency of Pembina, Don Orchard; immediately beside me, the Honourable Sam Uskiw, Mini ster of Highways and Transportation; and on my far right, Mr. Henry Carrell, the Member for Brandon West; beside Henry, the Honourable Pete Adam, Mi nister of Mun icipal Affairs.

We are awaiting two gentlemen who stopped to grab a bite to eat after arriving here about quarter to one, the Honour able John Bu ckla sch uk, Mi ni ster of Consumer and Corporate Affairs and the Honourable Billy Uruski, Min ister of Agriculture. We'll consider them introduced when they come in with their tail between their legs for being late. The purpose of these meetings - another member of the committee is the Honourable John Plohman, Mini ster of Government Services - but we did expect him to be somewhat late.

Hopefully, the other two will be here before he arrives. 263 The purpose of this meeting is to hear representations on the Western Transportation Initiative proposed by the Government of Canada. You will all have in front of you copies of a resolution passed unanimously by the Manitoba Legislature on March 15th which reads as follows:

WHEREAS, on February 22, 1983, the Saskatchewan Legislature unanimously passed the following resolution: Because the proposals advanced by the Mini ster of Transport for Canada to replace the statutory Crow rate: 1. Do not recognize the principles of a statutory rate for grain; 2. Do not provide cost protection for farmers; 3. Do not recognize that grain must be sold in a competitive international environment; 4. Do not remove the distortion in rates by including all prairie crops and their products under the new structure; 5. Do not deal with unacceptable high taxation levels on farm input such as fuel; 6.

Do not pr ovid e suf ficient pe rformanc e guarantees for the future growth and development of all facets of prairie agriculture; 7. Prescribe an unacceptable limit of 31.1 million tonnes for subsid ized shipments; 8. Provide central Canada with further artificial processing and livestock incentives; and 9. Are not supported by a consensus of Western Canadians. And because these are fundamental concerns and must be dealt with in any plan for the western rail transpor tation system, this Assembly ther efore rejects the Pepin plan.

THE REFORE LET IT BE RE SOL VED that the Legislative Assembly of the Province of Ma ni toba concur in the abov e reso lution passed by the Saskatchewan Legislature; and BE IT FURTHER RE SOL VED tha t the Standing Comm ittee on Agricultur e of the Leg islatur e be authorized: (

a) To inquire into matters relating to the Western Transportation Initia tive proposed by the Government of Canada; (

b) To hold such pu blic meetings as the commit tee may deem advisable; (

c) To report at this Session of the Legislature. That is the mandate of the committee. In addition, staff have prepared a

summary of the federal Western Transportation Initia tive which is appended to the committee resolution. If you didn't get one, there are sufficient copies at the door. The Western Transportation Initiative is outlined on this six-page fact sheet. Rather than read it to you, you're certainly welcome to peruse it at your leisure to get an understanding of any of those issues which may have been unclear in terms of the basic facts of the proposal. Western Transportation Initiative:

Monday, 25 April, 1983 1. The Federal Government will implement the principle recommendations of the Gilson Report for the four-year period, 1982-83 through 1985-86. 2. The Federal Government has defined the Crow Benefit Payment as representing the di fference between the amount paid by producers, under the Crows Nest Pass Rate, and the actual cost of moving grain during the crop year 1981- 82 and has calculated it to be $65 1. 6 million. The average Crow rate was $4.89 per metric tonne for the Prairie region and $3.65 per metric tonne for Manitoba. 3. Starting in the 1983-84 crop year, producers will pay (

a) The total cost of any future volumes of grain and grain products exceeding 31.1 million tonnes; (

b) The first three percentage point s of railway cost increases due to inflation in the crop years 1983-84, 1984-85 and 1985-86; (

c) The first 6 percentage points of railway cost incr eases due to inflation for the crop year 1986-87 and beyond. 4. Blended freight rates set by April 30th of each year for the following crop year by the Canad ian Trans por t Commi ssio n, after consultation with grain ship pers and railways. 5. Freight rates will remain generally distance related. 6. (

a) Under the Gilson recommendation, the federal contribution will be di vided between the railways and the producers. In 1982-83, 100 percent of the federal contribution will go to the railways. After that the proportion paid to the railways will decrease over time to a minimum of 19 percent by 1989-90. In 198 9-90, 81 percent will be paid to producers. (

b) The method of paying the government contribution will be that recommended by Dr. Gilson, but the method will be reviewed in 198 5-86, when the split is approximately 50 percent to each party. Parliamentary approval will be required to continue any further progression of payments to the producers. 7. Payments to producers will be on a acreage basis, including cultivated acreage devoted to non-Crow crops and to Crow grain used on the Prairies, not on the basis of tonnes of Crow grain shipped by rail.

Since this would mean less money per tonne of grain shipped, the Federal Government will pay the producers an additional $204 million for the crop years 1983-84 to 1985-86, as an agricultu ral adjustment payment. The Federal Go vernment will commit an additional $56 million after 1985-86, if the phased payments continue to 1988-89. 8. Canola oil and meal and linseed oil and meal will be included under the new statutory rate regime in 1983-84.

For the crop year 1982- 264 83, these products will be assisted through an existing prog ram in the absenc e of legislation th at will pay the di ffe rence between the statutory rate and the current minimum compens atory rate west of Thunder Bay. Ho wever, the Federal Government believes the commercial rates for these products beyond Thunder Bay to eastern markets shou ld be established. Cu rrently the rai lways charge a lower minimum compens atory rate on these products. 9.

A new grain transpor tation agency will be establis hed to perform the current duties of the office of the grain transporation co­ ordinator and will have an enlarged mandate, including car allocations, performance and service guarantees, and improved efficiency and capacity in the transporation system. 10. The Canadian Transport Commission will unde rtake the necessary major costing reviews every four years in consultation with grain shippers and railways. 11. The Federal Government will purchase up to 3,840 more hopper cars over the next three fiscal years.

Timing of the purchases will be made with the advice of the new grain transporation agency. 12. The Federal Government will commit an additional 670 million to branch line rehabilitation this decade. The future of the Branch Line Rehabilitation Program will be reviewed in 1985-86. 13. In accordance with the Gilson Report, the railway compensation of 100 percent of the long-run variable costs with a 20 percent contribution to overhead costs will be phased in. 14. The railways will receive 313 million for the crop year 1982-83 as a payment towards their shortfall in revenues in that year. 15.

Cost savi ngs due to br anch line abandonment or acquisition of government hopper cars will accrue to the Federal Government and shippers. 16. The Federal Government has agreed to extend special additional capital cost allowances to the railroads for investment in railway assets during the period January 1, 1983, to December 31, 1987. 17. In return for the implementation of the new rate regime on grain and the extended capital cost allowance, the two railroads have indicated they will: (

a) In crease investment in 1983 in Western Canada by 242 million and investment in Eastern Canada by 33 million; (

b) In crease investment in the period 1984- 87 in Western Canada by $2.592 billion and investment in Eastern Canada by $395 million; (

c) Me et specific grain transpor tation perfo rmanc e and branch line maintenance obligations. 18. Under In dustrial and Economic Development Init iatives, the Federal Gover nment will I

Monday, 25 April, 1983 commit $75 million over the next five years to: (

a) Deve lop railway equipment manufacturing indus try; (

b) Develop pr ocessing of agri cu ltural products in Western Canada; (

c) Assist supp liers of equi pment and material for future resource development projects in Western Canada; (

d) Assist western firms to develop new products and improved productivity and competitiveness. 19. Under Agricultural Development In itiatives, the Federal Government will undertake a five-year $175 million package of agricultural development in itiatives, including: (

a) Improving local feed grain self-sufficiency in no n-Canadian Whea t Board designated areas of Canada; (

b) Assis tance to farms and farm organizations for activities leading to im proved susta inable in creases in prod uction of gr ains, li vestock and special crops in the designated area of the Canadian Wheat Board; (

c) Assistance to the food processing indus try in Quebec; (

d) Soil and water conservation research in the Prairie provinces; (

e) Dev elopment of a crop informa tion system by Agriculture Canada; (

f) Development of an electronic marketing system by Agriculture Canada. 20. In 1985-86, the Federal Government will review the follo wing: ( 1) The sharing of grain transportation costs between pr oduc ers and the Federal Government.

(2) The system of payments to producers and progressing reducing distortions in the western agricultural economy.

(3) The possible im pact on eastern agriculture.

(4) The system of railway perfo rmanc e guarantees.

(5) The freight rates required to provide appropr iate compen sation to the railways.

(6) The futur e of the Branch Line Rehabili tation Program. At the conclusion of the hearings, you are also welcome to sign a list which the Clerk has to receive copies of the transcript of all seven meetings held by the committee. Transcripts will be available shortly after the conclusion of the hearings and copies will be mailed to anyone who registers with the Clerk to receive those copies. I have before me a list of 11 individuals who wish to make representations to the committee today. I'll read that list and then, if there is anyone else, we'll ask you to come forward to register: Mr. Don McEwan, Mr.

Bill Spen cer, Mr. Don Alexander, Mr. Bill Strath, Mr. Herman Rempel, William D. Sloane, Jack Penner, Paul Klassen, Mr. E. H. Evenson, Tom Jensen, and Ken Rutter. Is th ere anyone else who wishes to ma ke a presentation today whose name has not been called out? 265 Hearing none, I would like to call on Mr. Don McEwan. Mr. McEwan. If you could wait one moment please, Mr. McEwan, until the Clerk has distributed copies. Please proceed. MR. D. Mc EWAN: Thank you, Mr. Chairman. Mr. Chairman, members of the Mani toba Legislati ve Standing Committee, ladies and gentlemen, my name is Donald McE wan.

I am from Altamont and I have farmed there since 1953. My son and I now farm three­ quarters of a

section and rent 120 acres for a net total of 500 acres in continuous crop. We have a farrow to finish operation on the home farm and ship from 330 to 480 market pigs a year. I moved onto the home farm when I was nine months old. My father rented the farm at that time. I worked with him and my brothers until 1953 when I rented another quarter. In 1955 I rented the home farm, which I bought in 1961. I consider it to be a commercial family farm. I say this because we are efficient and productive enough to fit into the 35 percent of the farms in Canada that produce 70 percent of the farm produce.

I have belonged to the Manitoba Farmers' Union and the National Farmers' Union until 1973. I still belong to the Mani toba Farm Bureau because of affiliation with some commodity groups that I deal with: United Grain Gr owers, Mani toba Pool Elevators, and the Manitoba Hog Marketing Board. I am a director on the local U.G.G. board and a voting delegate from District 1 on the Manitoba Hog Marketing Board. I belong to no political party but I was a poll clerk at Altamont on two occasions, one in which the Federal Liberals were returned to power.

When I wrote to the Liberal Mi nister of Agriculture in Ottawa objecting to Marketing Bill C176, I got two replies, one from the Mi nister of Transport and one from from the Deputy Mi ni ster of Agricu ltur e, telling me I was a di rty Conservative brainwashed by the NDP. I hope I haven't prejudiced my case already. I am a Western Canadian with a decidedly more pro-Western view than anti­ Canadian. I believe in change, not for change sake but to make things better, particularly in Western Canada and the Province of Manitoba.

Because of this I cannot deal with the changes in the Crow rate on specific terms, but more in philosophical terms. I have an economic reference from the past because this is what I have observed. When my father farmed in the 30s and 40s, he paid Crow rate on grain. Sometimes it was 20 percent more than the railways were charging to move regular freight at the time. Sometimes the Crow rate was as much as 25 percent of the total price of the grain. Since I started to farm, there has been a continuous trucking program on the farm to move surplus grain.

We raised cattle and hogs in the 50s and 60s because there was that wonderful unit of 300 bushels of grain that went on in August and sometimes you didn't get a delivery until January because of plugged elevators. We sold registered grain into the American seed market, cleaned, bagged, and treated for a net return of $1.25 to $1. 30 a bushel. Thirty bushels per acre net was a good yield after 10 percent to 15 percent was cleaned out and 1962 marked the first time in my taming career that I was able to sell wheat to the elevator direct from the combine.

Monday, 25 April, 1983 During th ese years the feed grain was mo stly consumed by the li vestock on the farms. Hog prices varied from 18 cents to 35 cents dressed, and delivered in Winnip eg. Beef ranged from 18 cents to 35 cents live. We farmed for a subsistence living while grain sat in country elevators and on the farms. The Federal Government had a cheap food policy to keep the cost of living down. Surplus grain meant inexpensive meat and happy consumers. Our farmer owned elevators kept on the storage program that was started in World War 11.

They filled the permanent, temporary annex and their profit sheets looked acceptable. The railways took out sections of their trunk lines, turning them into branch lines to qualify them for grain transp ortati on subsidies. Tracks, road beds deteriorated, and all levels of government turned a blind eye on the situation. They, in turn, spent millions of tax dolla rs to build highways and airports to move people in a faster way.

The Crow rate didn' t generate enough revenue, grain didn't move and farmers who wouldn't or couldn't work for a bare subsistence sold out to neighbors, and the family farm as I knew it went out of existence. In 1967 we built the first part of our now confined hog barn. This was to be the trend of the future. In the same period of time, the mainlines of the railways flourished because of bulk commodities. Coal, lumber, potash, and cement all paid full rates, and the grain trickled through at periods of low density. Governments at all levels sat back and said they were well rid of these inefficient farmers.

The cities swelled with people. Jobs were plentiful while lumber, cement, iron and other commodities for urban growth kept the railways, airports and higways busy. The world was bery bright, though it was hard to see the sky through tha t new form of matter; pollution, rural, ind ustrial and urban. In 1973 I cleaned out an annex for U.G.G. elevators and inqui red where the good looking wheat came from. "Put her there in '62, filled the annex. Been there ever since," came the reply. In the boredom of shovelling grain, my brain began to calculate. Two cents a bushel for every month, 12 months a year is 24 cents.

From 1962 to 1973 is 11 years. Storage cost to the taxpayers, $2.64 a bushel. The price at Thunder Bay was $2.40 less 9 cents. Elevator price at Altamont was $2. 31. The cost of the wheat in Altamont in 1962 was $1.40. Adding the storage to the 1962 price yields $4.04. Selling price at the Lakehead was $2.40. Loss on 11 year old grain is $1. 68 a bushel. There has to be a better way. We would have been further ahead to have burnt the 1962 crop.

I stopped in the hotel tor a beer and I said, "I think we should pay more freight to move our grain." Amidst shocked faces came the reply, "Don't rock the boat, boy, if you get rid of the Crow look what it is going to cost the farmers. You must be a damn socialist or something." The same argument is being used today. In 1979 I was involved with a group of people trying to save the Morris-Hartney CNR rail line. lt was up for abandonment. lt was a period of growth in Western Canada and the main railway lines were running at peak capacity.

I was in the CNR Station at Somerset collecting data and the stationma ster had his radio phone on. There were three different sidings with three different unit trains stacked up between Portage and 266 Winnip eg waiting for a priority west bound train. The stationmaster assured me that this was quite common. I then talked to a railroad official from CNR. He stated that double tracking would help, but by 1985 projections showed the same line would only take 90 percent of the traffic even with double tracking. lt was apparent to me that more money had to be inj ected into our railway system.

In 1979 Seedex Elevators at Deer wood, 2.5 miles east of our farm, was shipping peas without Crow benefits at 83 cents a cwt.- that is $18 .27 a tonne or 49.8 cents for a 60 lb. bushel - approximately 5 times the Crow. To me the answer was simple. Leave the Crow rate as a basic unit and work on multiples of this unit. As an example the producer would pay three and the government would pay the remaining five. The railways would receive full compensation to Thunder Bay. The grain would then be sold in stores at Thunder Bay.

The same unit multiples could be used for the eastern users to move the grain east of Thunder Bay. Too simplistic, I suppose. In this freight rate controversy, there is another aspect that is all too often forgotten. If I may dwell on the past for a minute, I would like to take you back to the late 60s. Western barley sold from farm to farm and feed mill for as low as 50 cents a bushel. The eastern feed mills and feeders decided that they should get barley at the same price or they were at a disadvantage to the western feeders. The eastern feed grain subsidy was born.

Around 1976 it was replaced by the domestic market or the competitive price. lt took away the West's competitive edge. With it and farm building subsidies in the eastern provinces, the hog produc ers and feed lo t operators incr eased production dramatical ly. Beef producers in Western Canada are in the same position but allow me to quote a few figures from the hog ind ust ry.

This is hog production province by province 1971 and 1981: Quebec 1971, 1,928,000; 1981, 4,773,000 Ontario 1971, 3, 141 ,000; 1981, 4,049,000 Manitoba 1971, 1,331,000; 1981, 1,16 9,000 Sask. 1971, 1, 250,000; 1981, 657,000 Alberta 1971, 2, 01 5,000; 1981, 1,577,000 Total East 1971, 5,069,000; 1981, 8,822,000 + 3,753,000 Total West 1971, 4,596,000; 1981, 3,403,000 - 1, 193,000 The eastern provinces have taken over the production of 1,1 93,000 hogs and have added an additional 2, 560,000 hogs to the market. At an average of $90 a hog the lost revenue to Western Canada is at least $107,370,000.00.

Couldn't the economy of Western Canada use that kind of money now? We are losing over $100 million every year. The eastern feed grain subsidy and the corn competitive price for domestic grain were supported by Sask Pool and the Union of Quebec farmers - the same two groups who are opposing the Crow changes. Mr. Chairman, when Sask. Pool and the eastern interests get together on a farm policy, the farmers of Western Canada are left not unlike the proverbial Madam working in a brothel. The harder we work, the more often we get screwed.

I can never get a definite cost of these programs to the western producer but a guesstimate for the crop year 1981- 82 was $10.2 million with $8 million being

Monday, 25 April, 1983 paid by the Federal Treasury, and that was one of the better years. I'm sure this kind of money could pay a lot of freight. Another insidious side of this program is that rai lroads must haul this grain at Seaway competitive prices 12 months of the year. I believe that all western freight rates should be reviewed and upgraded. I talked to one man in the food ind ustry about a freight policy I'v e only heard of once; The Panama Canal Competitive Rate. Goods shipped west by rail have to compete with this, even though no one has shipped via the Panama Canal since the early 1900s.

The trucking of grain is going on right now in some areas of Southern Manitoba and is growing, in spite of the fuel costs and the existence of the Crow rates. The cost of our shipping hogs to Winnipeg has increased from 73 cents cwt to $2.40. If it takes 14 bushels of barley to market one hog that comes to 29 cents a bushel for 90 miles. When I started farming I believed that by the time I retired bulk wheat shipments would be a thing of the past. Even in the '60s I listened to experts that predicted by now we would be extract ing and refining 14 to 20 percent of the wheat.

This would be exported in a concen trated form to be blended in overseas mills. Ins tead, we have subsid ized bulk exports of wheat and the experimentation that I talked about in the past has sunk into oblivion. As a result, the flour indu stry has all but disappeared in the west. Recent figures show Canada as being second from the bottom on a list of world flour producers at 1, 771,0 00 tonnes of flour. The Soviet Union was at the top with 41,5 79,000 tonnes. Western Canada has remained a sou rce of raw resources to be pi lfered, not only by the east, but the rest of the world as well.

As I stated, I believe there is great need for change in the freight rates in Western Canada, but I challenge all levels of government - municipal, provincial, and federal, to overhaul their present tax structure. I believe the No. 1 problem for farmers today is not inflation, the economy, or the weather, but overtaxation. I read of government aid to the tune of $1. 5 billion a year being spent on foreign aid without proper allotment or even a director.

I am reminded every time I fill the tractor up of our country's debts and the National Energy Policy, and the burden it has placed on the prod ucers requiring fossil fuels to operate. I am concerned, not onl y for farmers, but also for transporta tion, fertiliz er, and all forms of primary and secondary industry that require fuel to function. The table you have been supplied with will help to show the dramatic increase in fuel prices we have experienced. I believe that 20 percent of this is tax related.

When our production costs for fertilizer and spray range from $50 to $55 an acre and fuel costs are $11. 86 an acre, it is a tremendous tax burden on the primary producer. If we fail to put together the right combination in a renewable resource, such as, farming, there is no income. With no income the tax fails to be paid because it cannot be passed on in the marketplace. Every time an ind ividual or an indus try seeks a subsidy we encourage inefficienc y; we increase the price of goods or the tax burden on the rest of the country.

Perhaps the farmers could pay the full rate if some of the tax burden was relieved. I do not understand the Pepin proposal because ever since the Gilson report every paper I read is either advising changes or demanding proposal be stopped. Perhaps this reflects on the amount of un bia sed inf ormation available to farmers. Onl y when it is documented and presented as a bill to Parliament we'll be able to study the content and then it will be all but too late to comment.

I submit to you, Members of the Committee, that every successful businessman or company uses the same principles as the CPR. lt is a company that is entirely Canadian and perhaps without it there would be no Canada as we know it. As Canadians we seem to hate and distrust a successful company. Would it be better if the railroads were American-owned and operated? I don't like the thought of the CPR being government-owned because it is apparent to me that lately the government tends only to run good deficits.

We must remain high on the list of freight priorities, even after this recession; freight traffic will increase. We now enjoy a 1 - 5 rating, which could slip to 25 - 30, if other traffic picks up. MR. CHAIRMAN: I believe you missed a page, unless I have an extra one. MR. D. McEWAN: I could have done. No, you're right, sorry about that. 267 As a hog producer, I am deeply concerned about the packing indus try in Manitoba. With or without changes in the Crow this in dustry must be upgraded to make it more efficient.

The plants tell us there is no problem, but when the Hog Board has to export live hogs up to 20 percent during the Schneider's strike it indicates that something is wrong. If two plants close in Winnipeg, 40 percent of the live hogs will have to be exported out of the province. This means one more raw product being exported without the jobs and revenue that processi ng brings. Can we no t negotia te with management, labour, city councils and different levels of government, and the producers to find an acceptable method of keeping Manitoba produce competitive?

This is going to be a difficult task because we should have started 10 years ago, not some time in the future. I have mixed emotions about variable freight rates for the grain ind ustry. The Pools are against them, but my figures show that th ey, themselves, practice variable elevation charges for different grains in the same elevator. lt will not be the Crow that preserves the family farm, but the world economic conditions that will determine what happens to us.

Will we be forced to expand into bigger and bigger units, or can we operate as moderately-sized but efficient farms; ones that could support a population relevant to the land base, thereby distributing jobs and people more evenly between rural and urban areas? The Crow rate will not save the family farm hog producers in Quebec either; they only raise 20 percent of the hogs in that province. The totally integrated units supply the other 80 percent on small land bases. We must pay higher freight rates to keep our products competitive. We must remain high on the list of freight priorities even after this recession.

Freight traffic will increase. We now enjoy a 1 - 5 rating which could slip to 25 - 30 if other traffic picks up. In other words, the farmers who threaten to stop the grain shipments, unless the

Monday, 25 April, 1983 Crow is retained, may be run over by 27 units loaded with other commoditie s before a train even stops for grain, unless we remain a prior ity. In conclusion, Mr.

Chairman, freight rate changes will not be the only determining factor in the economy of Western Canada, but they will play an important part The success or failure of the grain producers will be determined outside of Canada. lt will be programs like the American PIK Progam, billion dollar subsidies to the common market, crop failures in India, the ability of China and Russia to come to self-sufficiency that will affect Canadian farmers. lt will be the stability of foreign governments like Africa, the Middle East, the Eastern Block, Central and South America that will effect us.

We will also be affected by the stability and the reliability of our own politics. If supply-management programs such as CANAGREX are allowed to stifle agriculture the way the National Energy Policy has affected the oil ind ustry, there will be no place for the farming community in Canada. We are only 4 to 6 percent of the voting public, we lack political clout But if political policies have helped to create problems associated with rural depopula tion, then it is the politician's duty to help supply a cure. We are totally dependent on politicians to create an atmosphere where we can produce and prosper.

Take good care of us, for without our prosperous and efficient farm ing commun ity, your cities will die. Mr. Chairman, Page 12 is, I had to base Deerwood as the only place - it's five miles from Altamont. lt used to be on the same freight rate when that elevator hauled grain and that's why I used them to show what the increase has been in the rate; it's what I have for comparison. Anyway, April 15th, 1983: full rate, peas Deerwood to Thunder Bay $1.54 cwt or $33.91 T. In 1979, the same rate was 83 cents cwt or $18.27 T. In 1983, for sunflo wers the full rate now is $1.75 cwt or $38.53 T.

Do you want me to explain the rest of it? MR. CHAIRMAN: I don't think that's necessary, Mr. McEwan, since all members have a copy of the table in front of them. MR. D. Mc EWAN: Fine. That just goes to show, in my opinion, what the National Energy Policy has done to our transportation costs. MR. CHAIRMAN: Mr. McEwan, thank you very much for your presentation to the committee. There may be some questions from members of the committee. Gentlemen, any questions for Mr. McEwan about his brief? Mr. Mann ess. MR. C. MANNESS: Thank you, Mr. Chairman. Mr.

McEwan, by your brief it's obvious that you also are in the hog production business. How do you feel as a hog producer as one who produces grain and livestock, that you will share in the Crow benefit on all your acreage? What are your feelings on that type of system? MR. D. McEWAN: I have mixed emotions about that too. When I sat down in 1979, I expected to pay full 268 rate on the grain that I put over the railroad. I still can't come to grips that they should pay me for what grain goes into my hogs.

I think that, as a producer, I have an obligation to try to produce that product as cheap as I can and I can't see why I should have a subsidy for something that I don't ship. it's as simple as that. MR. C. MANNESS: What you're saying then, Mr. McEwan, if all livestock producers thought like you did, that indeed, there would be one less hurdle to this whole issue? MR. D. McEWAN: I suppose. I would like to say something more. People tell me that Crow was legislated at one time and it was never changed.

That's not right. lt has been changed over the years, and I have a list here, if you'll bear with me. lt was signed in 1877 and to get the Crow rate, and I think I might be a little fuzzy on this one, but CNR had to take over a bankrupt mine and a bankrupt railroad somewhere around Nelson. In 1902, it was made lower. In 1918, the Crow rate was raised a little higher. In 1922, the Crow was rated on lines accepted at 1897. In 1925, The Railway Act agreed on rates on grain from Western Canada to Thunder Bay and east In 1927, Vancouver was added to the grain rate. In 1931, Churchill was added.

In 1961, rapeseed was added. I believe that if it had been updated every decade we've since then, in the 1950s, in the 1960s, we wouldn't be in the mess we are in this controversy today. MR. CHAIRMAN: Further questions? Mr. Uskiw. HON. S. USKIW: Mr. McEwan, you presented a most interesting brief. lt almost comes through on both sides of the question and I appreciate why. You're essentially making the argument, I gather, that you believe there has to be an upgrading of freight rates; you don't believe that acreage payments should be paid to farmers in the region as a means of achieving that? MR. D.

Mc EWAN: I can't get this part through my head, that I should be subsid ized for something that I'm not using. I'm maybe too much of an indi vidual, I don't kn ow. HON. S. USKIW: What is your position with respect to by-products, oil and so on, meal? Do you think they should be under Crow or under the same rates as other grains? MR. D. McEWAN: I still think that if the right structure had been and we had been paying, and rapeseed - are you talking about rapeseed? HON. S. USKIW: Yes. MR. D.

McEWAN: If it had been left and we had been paying the right freight rate all the way through and this is why I talk about freight rates coming back west again, that we wouldn't have to subsidize anything. We would be moving, not bulk commodities all across Canada, but just the produce and therefore we would have more people working in Western Canada. I

Monday, 25 April, 1983 HON. S. USKIW: So, your argument then is that the historic Crow rate was actually counter-productfve to Western Canada for the 86 years, that we would have had a mo re div ersified economy had we had compen satory or commer cial freight rates in all commodities? MR. D. McEWAN: No, I said since 1950. lt should have been started to upgrade it in 1950, because to me we have disregarded a lot of research that could have saved us a lot of money. HON. S. USKIW: Why do you pick the year 1950, Mr. McEwan, as opposed to the historic rate all the way back? MR. D.

Mc EWAN: Because this is what I can gather was the year that the railway started to go in a large deficit and they started to neglect the grain, and, sir, I lived through a period in the 1950s where southern Manitoba grain was neglected, I still live in it. Between the freight and the quota acres we have, we cannot sell our produce to the maximum that we can produce on our farms. We have to go to different - and I'll tell you why, because I believe right now that a lot of our surplus product is being trucked to Minn eapolis, it's rye, it's flax, it's corn.

I know that one year there was 100,000 bushels of flax went out in a four-mile area around my place, went out by truck. I had to haul mine to another elevator to get it on a car, to take it to United Grain Growers terminal in Thunder Bay. I know of a man that piggy-backed flax at $1.00 a bushel in February of this year and it went to Thunder Bay and because of a premium at the Lakehead that they couldn't get the grain in position, he got 5 cents a bushel less than what he would have, and mine is still in the granary? HON. S.

USKIW: I take it then that what you're really suggesting that would be the best solution, and should have been many years ago, is an open market system for transportation so that the level of compensation for transportation would find itself without regulation. MR. D. McEWAN: Are you saying that I am condemning the Wheat Board? HON. S. USK IW: No, let me rephrase that. MR. CHAIRMAN: Do you want to rephrase you r question, Mr. Uskiw? HON. S. USKI W: Are you suggesting that we would have been better off to stay with a free competitive railway freight system as opposed to a regulated system by statute? MR. D.

McEWAN: I have come to that conclusion, yes. MR. CHAIRMAN: Further questions for Mr. McEwan? Mr. Orchard. MR. D. ORCHARD: Mr. McEwan, you mentioned off­ board movement of flax and rye to Minn eapolis, etc. What's ballpark truck freight on that per bushel? 269 MR. D. McEWAN: I don't know to Mi nneapolis. I would think it would run in the neighbourhood of 35 cents to 40 cents. I never trucked any that way, Donald, but I know that from our place to Stowe's which is 14 miles, it cost me 10 cents a bushel for 1,000 bushel load. I know that.

To bring barley from our place to Winnip eg, I priced it last fall. it's 18 cents a bushel per loaded mile. MR. CHAIRMAN: Mr. Downey. MR. J. DOWNEY: . . . one of the points that I think Mr. McEwan has made, I think, that is probably more revealing than anything, that's in the last part of his brief where he has indic ated that purple diesel fuel which he uses on the farm has increased in 1973 from 29 cents a gallon to $1 .60 in 1983. Mr. McEwan, you would, by these figures, be indic ating that is, by far, more of a concern of you than it is, of course, of the transportation costs.

You ind icated as well the percentage of tax that was on that fuel. Did you give us a figure on that? MR. D. Mc EWAN: No, I can't find out. I wish somebody in the Department of Agriculture in Ottawa would come and tell me, this is a wellhead price; this is what we put on for royalties in Alberta; this is what the Federal Govern men t taxes us; this is what the Provincial Government taxes. All I said, Mr. Downey, was that at 20 percent, this increase has put a load on.

I don't know what it is but I know one thing; that when you drive into my tank and fill up at my house with heater fuel and you drive over to my other tank and fill up from diesel fuel out of the same tan ker, there is two cents a litre difference. That one I know for sure. it was two cents a gallon, now it's two cents a litre for the same fuel. MR. J. DOWNEY: Just a further comment, Mr. Chairman, rather than a question dealing with that, talking about the tax on fuels.

I think when you are considering non-purple fuels like straight consumer fuels that it is in the neighbourhood of two-thirds of the cost of that fuel is either provincial or federal tax, so you're quite correct. If some of the tax burden were relieved, then the farmers probably wouldn' t mind paying a little bit more money for their transportation costs. That's all. MR. D. McEWAN: All I am saying, Mr. Chairman, is that talking to my transfer driver, that his costs have been mostly fuel-related. They went from 73 cents a hundred to $2.40 a hundred.

When you look at the tractor cost per hour. when you go from 1973 at a $1.45 an hour for five gallons to $8 an hour in 1983, that I don't think that your transportation costs are going to increase that much. MR. CHAIRMAN: Thank you. Mr. Uruski. HON. B. URUSKI: Mr. Chairman, just one question, on Page 9 of your brief at the bottom, the last sentence, "We must pay higher freight rates to keep our products competitive." Can you elaborate on that statement?

Monday, 25 April, 1983 MR. D. McEW AN: I knew that line was going to come back to haunt me. We didn't edit it out. When I am saying "we" I rather should have said, both Eastern and Western and Canada - this is what I meant to say. This would come after my table on the hogs and how we've lost the production. HON. B. URUSKI: You're advocating a totally open system in terms of the production of agricultural products, non-regulated. MR. D.

Mc EW AN: In transporta tion, yes, because this is what I have seen that has happened to Manitoba and Western Canada and especially Saskatchewan where you can take beef and buy it in Western Canada and take it down on the hoof, finish it in a feedlot in Eastern Canada, turn around and send it back here to where we consume it. If the trend had kept going the way it was and still keeps going, well you can see the mess our feedlots are in. lt is going to get worse. MR. CHAIRMAN: Mr. Adam. HON. A. ADAM: Thank you, Mr. Chairman. Mr .

McEwan, I think it's Page 6 of your brief where you ind icate - well at least, you leave the impression that the Crow Rate has distorted the hog production in Canada or sh ifted to the east. I think that is the impression I am getting from the comments that you make !hereon. Is that correct? MR. D. McEWAN: No, you can't blame that on the Crow. I get more upset over what used to be the eastern freight subsidy on western grains, and this corn­ competitive price.

Now if anybody can tell me, and I've studied it, how they arrive at a corn-competitive price, I do not know, but I know that at one time two years ago, western barley was being consumed in Ontario and they were underbidding American corn in Cuba. That was eastern corn. lt went to Cuba. This part of it, the Crow was always there, but this part that was born around the late '60s and it continued on through the '70s, that has been the detriment to the western livestock producer. This is why I wish somebody would take a look at all aspects of grain transportation, not just the Crow. HON. A.

ADAM: The federal proposal is that changing the Crow Rate, doing away with it, will advantage Western Canada in hog production and red meats, beef and hogs and so on. That's what they say out here. They also say that any adverse effects that will affect eastern producers by this change, they will address that question and subsidize eastern producers. So my question, I guess, is, where are we at if there is no advantage to western producers? MR. D.

McEWAN: I can't tell you that, but I kn ow one thing; that if the Provincial Government in Quebec could sign an agreement to import grain from the Common Market which barley is running at $100 a tonne subsidy, and up until now the Wheat Board has stopped the importation barley into Eastern Canada, they wouldn't buy one bushel of western grain if they could get it cheaper. To me, when I was a boy Winnip eg was second 270 largest marketplace for livestock in the world.

Chicago was the first and now we don't even rate and something has gone wrong somewhere, and I can't tell you where, but it's something to do with taking this grain east in the raw product I'm sure of it. MR. CHAIRMAN: Further questions for Mr. McEwan? Mr. Adam? HON. A. ADAM: On Page 9 I think it is, Mr. McEwan, you indic ate that the CPR operates like every successful businessman. The company uses the same principles as the CPR. Ind ications are that the CPR has received over $1 1 billion since it was first started back in the 1867s or whenever it was. Their balance sheets show 11 .8.

Would that ind icate that's the same as any other small businessman? MR. D. Mc EW AN: What I am saying is that if you do not run a business for a profit and if CPR can get money out of the Federal Government and they go to bed without a conscience, that's their business. What I am saying to you, Sir , that I am tired of money being ciphoned off into places that are non-prod uctive and goes down the drain.

I think if you will go back to read Palliser's comment when CPR was deeded that 25 million acres - I take it this is what you're talking about as government grants - Palliser at that time said that this is an arrid, non-productive part of the country only good for Ind ians and buf faloes. The Canadian Government had just taken this land away from the Indians for nothing and I suggest to you that grant cost the Canadian Government at that time nothing, because that land was worth nothing until the railway went through it. HON. A.

ADAM: I don't want to get into the argument of what the land was worth that was taken away from the Indians. If you'd ask the Indians that they would have a different opinion. There are indi cations that farmers will be using approximately 16 percent of the transporta tion. They will be shipping 16 percent. lt is also indicated that the cost to the farmer will be 99 percent of any upgrading. Is that a fair proposition? MR. D. Mc EWAN: I can't comment on this because the only thing that I disagree with is this 31 tonne cap.

Because if you want a productive Western Canada and you want to turn it into what we have in Southern Manitoba which is a continuous cropping system, you are going to have to have maybe more than 16 percent added by the farmers to the rail traffic. But if we stay at 5 or we drop back to 5 and we don't pay the rates, we could be in worse shape than we are, paying more than our fair share. To me, if you look at this once on 12 here, on a bushel of wheat it cost me 57 cents.

I'l l tell you this is a good inte rest rate to store it for one year, and you add that to the 9 cents that I'm paying for wheat right now and you come up to two-thirds of the rate if I could move it. So we're covering up costs. We're blaming it on transportation costs which are covered up on our own expense sheets right at home. If you carry that wheat for two years, then you might just as well have moved it at a high rate.

Monday, 25 April, 1983 HON. A. ADAM: That's an assumption based on, you assume that the grain is going to move? MR. D. Mc EWAN: Sure. HON. A. ADAM: Yes, and of cou rse th ere's no guarantee of that. I was int erested in one of the comments you made when you said, in answer to Mr. Uskiw's question about being paid acreage payments for freight transportation, you said that you didn't feel you should be receiving for something that you were not using and paid for something. lt's int eresting because we had a farmer at Anoia who was a dairy producer, a milk producer.

He indicated that he was using all his grains on the farm for the milk cows, the dairy cows. He said that he didn't feel, even though it would be an advantage to him to have this new setup, after looking at all the implications around that benefit to him, he didn't feel that he'd want to see the Crow rate changed. This is the second person at least that I' ve heard make a similar statement. MR. D. Mc EWAN: Well when you're coming to freight rates and everybody assumes that freight rates right now under the Crow are distanc e-related, I talked to a Mr.

Caverly from Bowsman a week ago and he and I have had some great arguments over the Crow. He was quite surpris ed that from Altamont to Thunder Bay in Southern Canada I was paying 16 cents cwt, and from Bowsman to Thunder Bay was 15 cents cwt. I'm at least 350 miles closer to Thunder Bay than he is, and yet I'm paying a higher freight rate. So these anomali es have been in the system ever since it started. HON. A. ADAM: One last question, Mr. Chairman. You expressed some concern on variable rates I think during your comments. Is that a concern to you?

Do you think that might escalate rail branch line abandonments and closing up of elevators on branch lines? MR. D. Mc EWAN: No, I don't. HON. A. ADAM: Variable rates will not have an effect there? MR. D. Mc EW AN: I don't see how it can, no. MR. CHAIRMAN: Further questions? Mr. Bucklaschuk. HON. J. BUCKLASCHUK: Yes, two questions to Mr. McEwan. Mr. McEwan, I've just glanced through this again and I couldn't quite find what I was looking for. How important do you consider the agricultural sector of our economy to the well-being of our whole country? MR. D.

McEWAN: If your agricultural sector dies so will your whole countr y. If you go back in history, every society that built their high priests and had all their classes, had to have an agricultural society that would support the people that wanted to live in leisure or do different jobs in the city. Canada is no different. In fact 271 every time that we sell lots of grain all Canadians benefit for it because of the exchange that it brings back to Canada. lt's only been in the last five or six years that the Federal Government started to realize this. HON. J.

BUCKLASCHUK: Then your view is that agriculture is of paramount importance to our country. In your brief on the last page you'd indicated the success or failure of grain producers will be determined outside of Canada. You refer to the American PIK program, the billion dollar subsid ies in the European Common Market and other factors. You had stated that it's really the well-being of the indus try in Canada is very dependent on what happens in the outside world.

Would you not then agree that in view of the importance of agricultur e to the Canadian econom y that all Canadians, whether they be in the west or in the east or whether they be working in the city or wherever, have some responsibility to see that the agricultural sector survives. MR. D. Mc EW AN: Well, natural ly, yes. HON. J.

BUCKLASCHUK: Then, would you agree that when we are talking about moving this very important agricultural product, grain, that whatever requirement those railways have, those costs, which are basically transportation subsidies that would be involved, the transportation subsidies should be picked up by all Canadians? MR. D. Mc EWAN: No, I think you missed the point of my brief altogether. HON. J. BUCKLASCHUK: I may have. MR. D. McEWAN: That if the transportation costs had arisen, then you would be processing the raw materials in Western Canada and shipping them out in a process form and not in bulk commodities.

We have built inequities into the sytem; somebody will say, well, I can't afford to ship this grain, but if it had of been in flour, or if the hogs would have been cut up and the usable by-products taken out, we probably could have shipped it at half of the cost for subsid ies as we have in the past. MR. CHAIRMAN: Further questions? HON. J. BUCKLASCHUK: But the reality is that the Federal Government has said that it will protect the processing sector in Eastern Canada. Now, that being the case, how are you going to develop this increase in production in Western Canada? MR. D.

McEW AN: I can't second-guess politicians, but this, as I'm saying to you, as an Agricultural Committee, that if you reject any change per se, you're just helping the Federal Government to keep these inequities in the system, and somewhere in Western Canada we have to get together and say, look we want some of the money for processing up here. MR. CHAIRMAN: Further questions? Mr. Bucklaschuk. HON. J. BUCKLASCHUK: But the reality is, and we all know it, that the seats are in Eastern Canada and I don't expect that there will be much change.

Monday, 25 April, 1983 One further question, you had made reference to - I'm going to go back to the question Mr. Adam raised - every successful man or company uses the same principles as the CPR. This whole exercise that we're going through right now is to deal with the issue of meeting the requirements of CN and CP to help with their transporation costs. We've had two presentations from CNR. I'm just wondering, how do you view the fact that in the seven or eight meetings we've held so far, on this very important issue, that we've had no representation from CPR? MR. D. McEWAN: I don't know.

I'm not being facetious, I'm just a private indivi dual, but I can show you from an old map that I have here of CNR where our line that was up for abandonment could have been changed into a very good unit train line, by-passed Winn ipeg altogether, and we could have got our commodities in from Western Canada, our fertili zer, lumber and what have you.

They could have picked up our grain, it would have come down to Emerso n, by-passed, caught South Junction, went to Thunder Bay, which was written off way back in the 50s because there was no money in that br anch line, plus the fact that th e Federal Government threw a bunch of defunct lines on top of CPR and broke them. I would like to see CPR tell me, or CN, or the Federal Government, exactly what it costs me to ship a bushel of wheat to whatever boat they're loading it on. When they load it, I think it's transferred again at Montreal onto the bulk carrier, it goes overseas, the Lakers come down.

I would like to know the total cost of this grain and I think if anybody added them up they would agree with me that, instead of looking after the golden triangle down there we should have a processing industry in Western Canada. HON. J. BUCKLASCHUK: Okay, just one final question then. As I indicated, CN has made two presentations to this committee, do you not think that CPR had a responsibili ty, as well, to pr ovide us wit h that information? MR. D.

McEWAN: I live on a CN line and this is why I fought to keep it, was to keep CP from having all of southern Mani toba under their wing because, at that point in time, I could have seen where we would have all been hauling to No. 2 Hwy. or that track that runs along it. But, by keeping CN in there, and CN to me has been a very competitive railroad, I can remember back, when my father farmed it, grain came to Altamont from close to both CPR lines and went down the CN.

But, ali i' m trying to say about referring to GP making a profit, that we all have to make a profit when you're running a business or you don't su rvive. I wouldn't be sitting here with this suit on today if I hadn't been profitable two-thirds of the time that I have been farming. The first 20 years I farmed for nothing; since 1973 and times have been good and I hope that they keep on pricing our products competitive enough to move, and move in volume and not sit on the farms. MR. CHAIRMAN: Further questions? Mr. Adam. HON. A. ADAM: Just one more question. In my questions to you, Mr.

McEwan, I ind icated that the 272 Federal Government is indicating that there would be increased processing in the West, and you have ind icated that, as well, when you responded to Mr. Bucklaschuk's question; but, in view of the fact that Mr. Pepin has already indicated that he would not allow the Eastern producers to be adversely affected by any increased processing in the West, in view of that fact, what advantage will we have in the end, in the final analysis?

You said we have to sit down and talk with him and say, hey, it's our turn to have some benefits from processing, but I'm sure you're aware that's where the population is, in Quebec and in Ontario, and that is where the clout is, politically . How are are we going to overcome that if Mr. Pepin, when he is in Quebec speaks one message and, when he gets out here, it's another message, that's what I'm trying to say? MR. D.

Mc EWAN: Well this is a line of rhetoric I didn't want to get into, but I think you'd better reform the Senate and have one senator from each region of the country and they try to equalize what it comes from. This whole mess in the livestock industry comes from Eastern Canada wanting to be self-suffici ent, especially Quebec.

I suggest to you that if our hog prices hadn't risen about a year ago, that the subsidies that were paid by the Quebec Government would have broken the Quebec Government and, at one time, there used to be a lot of investment in Western Canada in agriculture and all of a sudden it's disappeared. This is what I said about the hog industry in Manitoba, I think it's time that we, as producers, instead of looking for subsidies and what have you, start buying share capital and telling these companies we want it invested in this place.

I don't know whether it will work, but it sure can't be any worse than what we've had. MR. CHAIRMAN: Further questions? Seeing none, Mr. McEwan, thank you very much for being here today and for making your presentation. MR. D. McEWAN: Thank you, Mr. Chairman. MR. CHAIRMAN: Mr. Bill Spen cer. Mr. Spenc er, please. MR. W. SPENCER: Mr. Chairman, members of the committee, ladies and gentlemen of the audience. I'll first give you a brief reason why we're submitting this document to you. I'll introduce the gentleman on my right, Mr. Bill Zettler, who is a farmer in Portage.

A few of us, approximately 10, concerned farmers from the Portage area met at a farmhouse of a friend of ours and decided to present a brief to this committee and this is the document that I have before me and I think it's been passed out to you. I might explain to a few frien ds and neighbours who are here and are wondering why I'm presenting this on behalf of Portage, being that I am not from Portage but I'm presently working in Portage and I own a farm in the Altamont, Manitoba area, and I was invited to this discussion by friends from Portage so they asked me to present this brief.

The Crow rate introduced in 1897 and conf irmed by parliament in 1925 has meant stable transpor tation costs to producers. This stabili ty is as essential today

Monday, 25 April, 1983 as it was in 1897, to all Canadians, not only to farmers. We feel that a fair transportation policy is so vital to the economy of the entire country that it should not be placed in jeopardy for the purposes of profit taking. lt is true that our transportation system has to be capable and efficient, but the burden of maintaining such a system should rest with the general population, not be placed on the shoulders of farmers alone.

Although there have been many statements in the press to the effect that most farmers realize that we need change, there has never been any concerted effort to a grass-roots opinion of the farmers on this subject. A referen dum of permit book ho lder s has been studiously avoided. One of the many inequities in the plan is that farmers situated on more productive land such as we in the Portage area farm, will be hit the hardest by proposed Crow benefit acreage payments. While a farmer would pay a higher freight rate on a per tonne basis on grain shipped, his Crow benefit will be paid on an acreage basis.

A farmer pays a higher per acre price for highly productive land and is taxed more heavily on it. He often farms smaller acreages but ships more grain than the farmer on less productive land. Farms of the second type tend to be larger in acreage and to include livestock operations rather than straight grain production.

Such a farmer may feed much of his grain and ship little or none yet because of his large acreage will receive a much bigger Crow benefit payment than the grain farmer who ships all of his crop and who will pay the added freight costs on every bushel he ships, thus being required to subsid ize the farmer on less productive land. Along came Mr. Sn avely. To begin with, we feel that the figures in the Sn avely Report are open to question. We understand that the accounting books of the railroad were never open to Mr. Sna vely and that a number of the costs included were merely estimates.

Much of the cost of hauling grain has already been supplied to the railroads. They have been supplied with hopper cars, capital grants, tax concessions, and branch line subsidies. They are not even involved in the loading and unloading of the cars. All they really provide is track, diesel power and a caboose. lt has been pointed out that the years of the railroads' greatest profits were the years of record grain haulage. Despite the loud complaints of the railroads about their monumental losses in hauling grains, they have never been known to offer the system for sale.

Paying the railroads higher freight rates will not guarantee better service. We need only look to our nei ghbo urs in the south where the unr egu lated compen satory rate system exists. The result is chaotic, with unreliable service, shortage of box cars and a deteriorated roadbed and tracks. Now in this area we're discussing are areas that are not in competition with the Mississippi River. We have reason for skepticism when we reflect on the postal service where the argument has been made that higher rates would provide better service. According to "The Manitoba Co-operator" , quoting Mr.

Nick Mulder of Transport Canada, "The railways will have a three-year trial period before having to give performance guarantees. During that time the railways will get the higher freight rates and subsidies before a system for rewards and penalties is instituted.

The railway companies will call the shots still and the movement of grain will not have a priority status over other products anymore than it does now. lt is ironic that a system that has treated the public so badly in the past should expect us to put our trust in it to provide these extra benefits in the future." No doubt a large amount of grain will be shipped by alternate methods if freight rates are inc reased. The bulk of this traffic will move onto our highways in semitrailers.

Thus after paying the rail roads to upgrade their lines the taxpayers will be required to pay for upgrading and repairing highways and grid roads. This is in addition to the fact that more of our precious energy will be wasted in this fashion. If the government is intent on spending this $650 million in producer subsidies anyway, would it not seem more reasonable for them to spend it dir ectly in upgr ading the tranportation system and leave the present Crow rate unchanged? 273 The change in the Crow rate has been touted as a stimulus to the wes tern li vestock busine ss and secondary indus tries.

However, we feel that eastern governments would work hard to protect any advantage that that part of the country holds in these ind ustries. Any over-production here would simply be reflected in lower prices. There is no way Manitoba could possibly benefit. lt has been estimated that the Crow rate abandonment will cost the average western farmer $8,000 a year.

Now on this, simple mathematics reveals to me and should reveal to the Chambers of Commerce of these communities that 100 permit holders is going to cost $800,000 in loss of revenue to that commun ity. lt is our opinion that any thinking politician in Manitoba should be working to defeat this proposal. The Crow rate was part of a la rger packa ge agreement and if the Crow rate is to be renegotiated then the entire package should be re-examined, not just the freight rates in isolation.

Transportation is so vital to the national int erest that it should be handled for the benefit of the entire country and not just the well-being of a few shareholders. We believe that the freight rate for grains known as the Crow rate, as paid by farmers, should remain at the present level and be extended to ot her agricultur al commodi ties. Any necessary subsidies should come out of the general revenue. In conclusion, Mr. Chairman, this arrangement was supposed to last forever and I doubt that we've reached that point in time. Thank you. MR. CHAIR MAN: Thank you, Mr . Spen cer, any questions for Mr.

Spencer pr Mr. Zettler or members of the Committee? No questions? Mr. Orchard. MR. D. ORCHARD: Mr. Spen cer, on Page 1, you mentioned a concern you had about the acreage payments. That acreage payment formula, we are led to believe, will have in it a factor to compensate for additional productivity where additional productivity is clearly demonstrated. Would that remove some of your concerns about the unfairness of payments on a simple acreage basis? MR. CHAIRMAN: Mr. Zettler.

Monday, 25 April, 1983 MR. B. ZETTLER: As I understood it, that hasn't been done yet. They're touting this as a plan, especially up in the northern areas, from what I understand from farmers they consider they'll get the same amount of acreage payments in arid regions, say, of Alberta, as what they're going to get right here. MR. CHAIRMAN: Mr. Orchard. MR. D. ORCHARD: I believe information that's been made available to the committee would indicate that they do factor in productivity to accomplish the very thing that you're concerned about to make sure that doesn't happen. Mr.

Spencer. you mentioned you had a certain skepticism in there for the postal service, where higher rates provide better service. There has been those who would propose the solution to this would be to nationalize CPR and make it another Crown corporation. Would you feel comfortable with CPR as another Crown corporation, as well as CNR, in the handling of our transportation system, basis your opinion on the postal service? MR. W. SPENCER: Would I feel comfortable? Yes. MR. D. ORCHARD: You think that they would be able to provide the better service for a lower price that the post office hasn't been able to do? MR.

W. SPENCER: Could you repeat that last part of the question please, Mr. Orchard? MR. D. ORCHARD: I'l l use your line in here. "We have reason for skepticism when we reflect on the postal service, where the argument was also made that higher rates would provide better service," and, since the post office is a Crown corp run by the same people, presumably, that would now run the new nationali zed CPR, you have the concern with the postal system but not the concern with the nationalized railway system. MR. CHAIRMAN: Mr. Zettler. MR. B. ZETTLER: You're missing the point of the question here.

We're talking about two different things. One, we're talking about incr eased rates, and another, we're talking about nationalizing the CPR. Now do you want to taik about nationalizing the CPR or do you want to talk about increased rates? They're two different things. You're mixing the two questions there. MR. D. ORCHARD: Let's separate it then. You, first of all, don't believe that increasing freight rates would enhance the movement of grains from the prairies? MR. B. ZETTLER: You mean that grains would take higher priority with higher freight rates? MR. D.

ORCHARD: And they would move at a higher volume at a faster rate. MR. B. ZETTLER: Do you not think then, maybe, that the freight rate on potash or something might go up then. too? 274 MR. D. ORCHARD: Now we're mixing potash and grain. I asked the question of you, do you believe, your statement obviously would indicate that you don't believe by paying more we'd move grain faster, and I just want to make sure that that's what your impression is? MR. B. ZETTLER: Experience, for instance, in the States, has shown that this isn't necessarily so. MR. D.

ORCHARD: Then, basis experience in the States, are you aware that in the decade of the 70s, the American grain export system doubled their exports to the world market while we incr eased by about 12 percent? MR. B. ZETTLER: Okay, we're talking about a whole different thing again. The production increased in the States because they got rid of the Set Aside Program there for a few years. That's why they have increased production; they got rid of the Set Aside Program so there was more stuff to export. MR. D. ORCHARD: And I suppose a railroad system might have helped moved that to export position? MR. B.

ZETTLER: Pardon? What you do want to talk about now, exporting? MR. D. ORCHARD: You're talking about surplus of grains and removal of Set Aside, but I would have to assume that at least some of that grain got to export position by using the railroads. MR. B. ZETTLER: The American system, if you have the American system, most of that goes by barge. MR. D. ORCHARD: I want to ask Mr. Spen cer, do you currently truck any grain off your farm, like flax, to altern ate markets like Min neapolis? MR. W. SPENCER: Currently, as in now? MR. D. ORCHARD: As in the last several years? MR. W. SPENCER: Yes I have. MR. D.

ORCHARD: Another question for Mr. Spen cer. You've indicated in the last page of your brief that a pro rata bantam will cost the average western farmer $8,000 a year. Where did you get that figure? How did you arrive at that figure? MR. W. SPENCER: Quoted from the CBC on last Monday, the CBC Journal. MR. D. ORCHARD: Okay. I might remind you that the CBC is another Crown corporation like the post office. MR. W. SPENCER: Thank you, Mr. Orchard, I was aware of that. MR. D. ORCHARD: Good. Now, do you know whether that $8,000 was a net or a gross figure to the farmer? - I

Monday, 25 April, 1983 MR. W. SPENCER: I expect it was gross. MR. D. ORCHARD: So then one would have to assume that the acreage payment would have to be deducted from that to arrive at the real cost and you're not aware of whether that was done? MR. W. SPENCER: No, I would assume that we would have to subtract the acreage payment but I am not sure. $6,000 probably would be a . . . MR. CHAIRMAN: Further questions? Mr. Plohman. HON. J. PLOHMAN: Mr .

Sp en cer, the previous presenter said that the increased transportation costs that would be incurred by producers, or at least I think he inferred that, six times the Crow, if the Pepin proposal was in place by 1990, would not have the negative effect on the farm communi ty, in the rural communi ties in Mani toba, on the producers, that many of us are saying that it would have because there would be all of the secondary processing that would spring up in Mani toba and western Canada, and so, therefore, I guess they wouldn't have to ship at this increased high cost of 6 times the Crow and it would stay here and be processed.

Do you feel that that is a theory that you could support or that you feel would actually take place or do you just miss that? MR. W. SPENCER: I don't think that will take place because we don't have the population base here to buy those products. MR. CHAIRMAN: Mr. Zettler. MR. B. ZETTLER: As far as this more processing here, I think one of the items that's been touted is we'll get more processing of rapeseed and so on, well, one of the countries that buy a lot of our rapeseed is Japan, and they buy as cheaply as they can.

If they buy the oil, they're going to buy it as cheap as they can, probably less than we can process it for, so if they can buy the raw product elsewhere for a more competitive price they're going to go there for it. They would prefer to buy our raw product, rather than our processed oil because they want to get the rapeseed there and process it themselves. HON. J. PLOHMAN: I happen to agree with you, Mr. Chairman. I just want to ask one other for your comments on farm organi zat ion s.

You kn ow farm organizations have made presentations, they've taken stands, they've negotiated with Pepin, and yet you're saying today there's never been a referendum, they've never asked a producer, something like we're doing here today and the series of meetings that the Mani toba Government has put in place. They've never asked, gone off to the people and asked for their opinions. Do you feel that the. farm organi zatio ns have represented their membership? MR. B.

ZETTLER: The representations that have been made by some of these or gani zatio ns really are commodi ty organizations; they're not really a producer organization. A good example might be the Manitoba Pool. Certainly they represent producers in a connection that has to do with the selling of their grain but they don't represent the guy at the bottom end. The fellow at the bottom end is the farmer and he's the guy that's going to have to pay the freight rates, not Manitoba Pool. 275 MR. CHAIRMAN: Further questions. Mr. Uskiw. HON. S. USKIW: I take it from your brief that you would want to leave things as they are.

Is that correct? MR. W. SPENCER: Yes. HON. S. USKIW: Are you then making the point that current subsidi es by way of hopper-car suppli es and branch-line subidies should continue? MR. W. SPENCER: Yes. HON. S. USKIW: Mr. Zettler, you mentioned a moment ago that in your opinion Manitoba Pool is not a farm organization, how do you arrive at that? MR. B.

ZETTLER: I think it was originally intended when the people got together to form this, it was a way of marketing thei r gra in , no t a grass-roots organization to be making poli cies for farmers, like in connection with their basic items they're growing and so on. it's a commercial organization. it's not a basic grass-roots agricultural organization. HON. S. USKIW: I'm somewhat confused by that because my understanding of it is that the delegates are elected.

In turn they meet annually to formulate poli cy for the organization as such and since delegates have to be elected at the local level, it bothers me to think that is not representative of local thinking or that it is not representative of producer thinking. MR. B. ZETTLER: Yes, it is a producer representative, rig ht, but it 's comme rcial. lt has to be wit h the commercial end of it rather than the grass-roots farm end of it, the agricultural end of it. HON. S. USKIW: Just to follow up on that, though.

The logical extension of producer power was the establishment of their own handling and distribution system so that in essence it's hard for me to understand that somehow there's a conflict between that system and the producers who put it there. Now, I know there is always room for differences of view as to what that system ought to do from time to time, but in terms of the way in which it's established I would have thought that we would have said it's great to have producer power extended by owning its own handling system, its marketing system or even own the railroad system if they can mus ter th at.

I have a diffi cult time understanding why we would not want to tie that much closer together? MR. B. ZETTLER: I believe in co-ops and pools too. MR. CHAIRMAN: Further questions? Mr. Manness.

Monday, 25 April, 1983 MR. C. MANNESS: Thank you. I'd like to ask either one of the gentlemen whether they are aware of the fact that railways were making a profit under the Crow rate until 1960 and that, indeed, the farmers paid the total cost until that time and that the taxpayers of Canada were not required to make payment to the railways to 1970 to subsid ize transporta tion.

I would ask whether or not you'd feel that inflation has had a tremendous impact over the last 10 or 12 years and has brought this whole crisis to a head and how long should the railways be expectd to haul at a time when inflation is compounding? MR. B. ZETTLER: Are you referring to the CPR here now when you get up? MR. C. MANNESS: Well on this issue I have a very difficult time distinguishing the difference. So, railways, general, yes. MR. B. ZETTLER: Well I think they have to look at the whole package here, like when you go to renegotiate a thing like this.

The whole package that was given to the railroads originally has to be considered. MR. C. MANNESS: Well, I'd like then to ask the witnesses, are they aware that indeed this was done and it was done unde r th e Ma c Pherson Royal Commission set up by John Diefenbaker in the early 1960s. That whole question was reviewed and indeed the conclusion dr awn at that time was that indeed those assets that were given were not to be considered. Are you saying you disagree with that, or, in fact, it should be looked at again? MR. B.

ZETTLER: Well, I don't agree with the findings of the MacPherson Commission that they only take the railway by itself and don't look at all these other assets. MR. CHAIRMAN: Further questions by members of the committee? Mr. Downey. MR. J. DOWNEY: I have a couple of questions to the gentlemen. They have ind icated they're not satisfied with the representation . . . MR. CHAIRMAN: Mr. Downey, could you use the microphone please. MR. J.

DOWNEY: . . . not satisfied with th e representation they're getting from the Manitoba Pool, what farm organization is giving the farmers the best representation on this whole Crow rate debate? MR. B. ZETTLER: Well, any direct farm organization that gets a membership fee right from the indi vidual producer is one that should be allowed to speak on behalf of the farmers. MR. J. DOWNEY: And which one of those in Western Canada, today, do you feel would be the best one to represent those farmers? MR. B. ZETTLER: The National Farmers Union, for myself. 276 MR. CHAIRMAN: Further questions by members of the committee?

With the committee's leave, I have a couple of questions I'd like to place to the witness. Mr. Zettler, Mr. Spen cer, you express some concern and you'v e gi ven me some concern about th e representivity of farm organizations further to Mr. Downey's question and many organizations have made presentations to the committee other than ind ividual farmers including the National Farmers Union. I expect we will be hearing from the Manitoba Pool, we've heard from several other organizations involved in agri­ business and other farmer organizations.

I'm wondering if you can tell me, in terms of those organizations, which organi zations you feel are most representative of farmers' opinions. Now, you've said for yourself the National Farmers Union, but you know, as I'm sure all the members of the committee know and that public, the National Farmers Union membership in Manitoba is not that large.

Now if you were to rate the various commodity groups, Hog Producers Marketing Board and other boards as well as other commercial interests, whether they be the railroads themselves or United Grain Growers or the Manitoba Farm Bureau or the Manitoba Pool, all of which purport to represent a much larger number of farmers than does the National Farmers Union, which one of those do you think would be most representative of farmers in the province, particularly grain producers? MR. B.

ZETTLER: First of all, to get back to the points, on a direct membership basis, like it's all very well when you might say Manitoba Pool, you might say Uni ted Grain Gr owers, you have overlaps of membership so you don't really know who's in what. The other thing is many of these organizations have conflicting views and then when they come up with a conflicting view they come out with a kind of neutral opinion on it. For example, the Federation of Agriculture, their opinion in some items become neutralized because they have people speaking from both sides. MR.

CHAIRMAN: So, you wouldn't want to then suggest that any one organization in Manitoba should carry more weight in terms of its represenations to this committee than any other? You're suggesting that really no farm organization speaks for the producers in this province with a clear voice as a representative of those farmers? Is that what you're telling us? MR. B. ZETTLER: Yes, I think that would cover it.

That's why, for myself, I would really like to see a producer vote, every permit book holder have a chance to cast a ballot as to whether they want this thing changed so that they're going to pay more or they're going to pay less. MR. CHAIRMAN: That was my next question, as to whether or not that was the reason you were putting that in there, because really you felt no one spoke for farmers. MR. B. ZETTLER: On a grass-roots basis, yes. That would be the way to get it, a vote. MR. CHAIRMAN: Thank you.

Monday, 25 April, 1983 Further questions? Mr. Uskiw. HON. S. USKIW: That la st an swer intrigues me somewhat. Do you think that a simple vote on the proposition as to whether you should pay more for transporting your grain to market or not is a valid way of putting a question to the public? MR. B. ZETTLER: Well it would be easier to understand and it it'd be sure a hell of a lot better than that rapeseed vote a few years ago where you got a "Yes" and a "No" and then a "No Opinion". HON. S.

USKIW: Do you think the Government of Manitoba or Canada could function financially if it had to put to a referendum every tax increase that we must make from time to time? MR. B. ZETTLER: Sounds like a loaded question. HON. S. USKIW: lt sure is. it's the same problem. We tend to vote for our immediate selfish interests is the point I'm making, and therefore it's very diffi cult, at least I would think it is, and I would want to ask your opinion on it. Is it not difficult to draw the kind of conclusion that we must draw from a sampling of public opinion?

Something very simpl istic simply can't suffice as I see it, do you not agree? Anyone will vote against something that's going to cost more money by and large if it's a very simple question Yes or No, do you want to pay more. MR. B. ZETTLER: Are you going to say though that there's not going to be any Yes votes there, because by the opinions that are being expressed by some people, you'd think they want to pay more. HON. S. USKIW: I would think that's fair, yes.

There likely would be some that would say, Yes we should pay more, but by and large referendums or votes that are put to the public are usually worded in such a way as to extract the desired result depending on who is putting forward the question. I really don't have any faith in that. MR. B. ZETTLER: I can help you with the question. MR. CHAIRMAN: Mr. Orchard . MR. D. ORCHARD: Thank you, Mr. Chairman, this subject of referendum as to whether you would pay more kind of intrigues me.

I'd like to know if you two gentlemen, had you had the opp ortuni ty of a referendum, would have chosen to pay the payroll tax, the increased sales tax, increased fuel tax in the last year and a half, and if you had the opportuni ty would you vote Yes for manda tor y use of seatbelts by referendum? MR. CHAIRMAN: Order; Mr. Orchard . MR. B. ZETTLER: lt sounds non-pa rtisan . MR. CHAIRMAN: I have some difficulty tieing this to our mandate on Western Transportation In itiatives. If you can stick the word "grain " in your question somehow, you might be able to cover it up. Further questions, Mr. Orchard. MR. D.

ORCHARD: No, that's fine. MR. CHAIRMAN: Mr. Adam. HON. A. ADAM: You talked about grass-roots representation or grass-roots farmer. You'r e here representing this brief, it's a personal brief. You're not representing any organization? MR. W. SPENCER: No, we're not. it's a group, as I said at the start, approximately 10 of us that met over a couple of evenings and it was signed. Also the document was signed by approximately 20 farmers, I have signatures of 20 farmers in the local Portage area. HON. A. ADAM: I see, thank you very much. MR. CHAIRMAN: Mr.

Spencer, when you refer to a signed document, have you provided the list of those indi viduals who signed the document with the Clerk, so she'll have that in her records? MR. W. SPENCER: I have not provided it yet, but I will at the conclusion of my brief. 277 MR. CHAIRMAN: Since the document is on behalf of all those indi viduals we should have their names in the record. Mr. Plohman. HON. J. PLOHMAN: it's been said by some I guess that the referendum idea isn't necessarily practical or should be necessary in all cases where major decisions are being made.

What do you think of an altern ative to that by the Federal Govern ment? If the farm organizations themselves have not given an adequate sampling of farm opinion on this question, do you think that the Federal Government should be, after tabling its intentions in the bill and so on, should be soliciting reactions from the farm comuni ty in a similar process to what we're doing right now in the Manitoba scene? MR. CHAIRMAN: Mr. Zettler. MR. B.

ZETTLER: That would be a last resort, but getting back to the referendums, hell they had one a few years ago to decide if you wanted to pay a charge for plant research or something. I don't think that's near as important issue as what this Crow rate deal is. Now if they could have one for that, why the hell can't they have one for the Crow rate issue? MR. CHAIRMAN: Further questions from members of the committee. Mr. Plohman. HON. J. PL OHMAN: So you would say either a referendum or a set of hearings to have people give their direct input would both be acceptable, but would be necessary?

Monday, 25 April, 1983 MR. B. ZETTLER: Yes. MR. CHAIRMAN: Further questions. Mr. Downey. MR. J. DOWNEY: Mr. Chairman, I don't want to prolong the questioning, but I do have a concern about some of the information that was provided in the brief. I understood that the figure of $8,000 came from the CBC Journal. Is that correct? MR. W. SPENCER: That's correct. MR. J. DOWNEY: Is that normally where the Farmers Union has their research work done? MR. W. SPENCER: We are not here, Mr. Downey, to represent the Farmers Union.

As I explained in the outset of this brief we were a group of concerned citizens from the area of Portage la Prairie who met at a kitchen table and come up with this brief and we're here presenting it to you. MR. CHAIRMAN: Further questions? Hearing none, Mr. Spen cer, Mr. Zettler thank you very much for making your presentation here today. The next name on my list is Mr. Don Alexander. Mr. Alexander, please. MR. D. ALEXANDER: Mr. Chairman, and members of the Standing Committee on Agriculture, I welcome this opportunity to present my concerns on the Western Transportation Initia tive.

However, before addressing the issue allow me to introduce myself. I am, of course, Don Alexander of Miami. I was raised on a farm and started actively farming in 1954 by renting land and working with my father. Later I bought out my uncle and finally my fath er. I presently own and operate 7 40 acres, 640 of which are suitable for grain production and consist of Class 2, 3, and 4 soils. I produce wheat, barley, flax, canola, sunflowers and corn under a continuous cropping program. In addition I have a few laying hens and in years past have raised cattle.

Next, let's look at some important historical dates; 1885, 1897, 1918, 1922, 1925 and 1952; 1855, of course, marked the completion of the transcontinental railway which was affectionately known as the CPR. lt was the culmination of a dream hatched by federal politicians. Naturally there were charges of scandal etc., but we must remember that there were at least three previous attempts to build this railway which ended in bankruptcy due to in sufficient funding and little prospect of immediate financial return.

After all we must remember that Palliser described the bulk of the prairies as a vast, barren was teland. Therefore the Federal Government's contribution to the CPR of $25 million and 25 million worthless acres must be viewed as an astute move, otherwise Canada as we know it today would probably not exist. In 1897 the Crow rate was negotiated between the CPR and the Government of Canada.

As you know it covered 289 delivery points and 2,9 15 miles of track and covered selected items moving east from the west, as well as selected items from Eastern Canada going to the prairies. 278 In 1918 the Crow rate was suspended by Parliament under the War Measures Act.

In 1922 the Crow rate was reinstituted on the CPR but only on grain and flour products moving from the prairies to Thunder Bay. 1925 brought about the unila teral action by the Federal Government in which the CNR, as well as the CPR, were compelled to haul grain from well over 1, 245 delivery points involving over 16,500 miles of track, not only to Thunder Bay, but Churchill and Vancouver as well at the Crow rate, or to be more precise, 1/2 cent a ton/mile.

I think it is important to remember that the railway didn't always charge the full rate, but alas, in 1952 the railways cried "foul", expenditures for hauling grain exceeded revenue. What would the government do? After all, said the farm commun ity, the Crow is enshrined in stone. But from the events that took place in 1918 , 1922 and 1925 it's obvious to me that such is not the case.

The Federal Government in a frantic attempt to walk a political tightrope set up royal commission after royal commission and introduced band-aid measures such as branch line subsidies, box car rehabilitation, hopper car purchases and other things.

Gentlemen, in in 1983, 31 years after the railway reached the break-even point, when the Crow rate represents 20 percent of the cost of hauling grain, when the primary elevators get twice as much for handling grain as the railways do for hauling it, when the cost of mailing a letter is 32 cents, when coffee is 50 cents a cup, we are still arguing the point whether the railways need a rate increase in hauling grain. In the meantime we have seen the quota system become a means of rationing rail shipping space to indi vidual producers. Unfortu nately, quotas are not based on seeded acreage alone.

Producers are allowed to include summer fallow as well as improved acres. Recently summer fallow has been identified by Bentley in Alberta and Rennie in Saskatchewan as the most important factor in soil degradation problems on the prairies. The only reason for the problem not being worse than it presently is, is that fertilizer is masking the effect, but unfortunately even with fertilizer yield potential is only 85 percent of what it should be.

Furthermore, improved land means running a bulldozer through a bush and calling it a pasture or draining a slough and calling it hayland, both extremely damaging from a land-use and a wildlife point of view. The Red River Valley is blessed with favourable soils and clima te such that special crops are very popular and have almost entirely replaced summer fall ow. This, in spite of the fact that many of these crops are transported at compensatory rates rather than statutory rates and I might add there does not seem to be a transportation problem.

The Manitoba Department of Agriculture, 1983 Crop Planning Guide ind icates that the total operating costs for producing one acre of wheat is $85.90 and that fixed costs are an additional $80.70 or a total of $166.60. In order to cover the operating costs at my delivery point where the initial price on No. 1 CRSW is $4.45 a bushel I would require a quota of 19.3 bushels per acre. Presently the quota is 14.5 bushels per acre which is far above what it has been in previous years at this time.

There are those, including my banker, who say that the $6. 10 an acre interest charge in the operating costs are not high enough. Others argue that

Monday, 25 April, 1983 one of the reasons operating costs are so high is because a substantial part of the costs are provincial and federal taxes. For instance, a tax on the natural gas to make a tonne of Nitrogen Fertilizer is $40 or approximately $3 an acre at the rate I use it. Another unnecesary high cost in the fixed cost category is the storage of the grain at $2.70 an acre. To those who say removing the Crow rate will destroy the orderly marketing system, I say, Poppycock! lt's being destroyed now by end-running the system in order to get the cash flow necessary to pay commitments on time.

When the Wheat Board claims that we are losing sales because of a lack of transportation, in 1978 the figure was $1 billion, I say we can't afford the Crow rate any lon ger. When one looks at our expor t performance over the last number of years, the picture to say the least is dismal. Same performance year in and year out with the exception of the last two years. In the meantime the USA has expanded its exports by 500 percent from 1970 to 1980. That certainly indic ates the market is there if we could only transport it.

Furthermore, I find it absolutely disgusting when USA terminals have a stock turnover of 15 times per year while we in Canada have difficulty with a 3.5 fold turnover of stocks in our term ina ls. Furthermor e, demurrage on waiting ships are a direct charge to producers simpl y because we could not deliver on schedule. The railways this past year have certainly proved that they can move the grain but if coal, potash and lumber start moving again you can't expect the performance to continue without in centi ves and sub stantial improvements to the mountain sections of the railways.

Many argue that these impr ovements will not help Manitoba. I urge you to remember that the market for the future is in the west and not the east. Furthermore, additional marketings through Vancouver means that the dividing line between Thunder Bay and Pacific coast po rts will move further east re sulting in high er movements per producer in the Thunder Bay area. To those who say that changing the Crow will not guarantee secondary processing, I simply say look at the bind the crushing ind ustry is in now with the Crow, they are certainly going to die if the rate is not changed.

Furthermore, if it does change there is plenty of room for additional expansion. In short, gentlemen, I think by and large that the Western Transportation Initi ative being proposed by what we consi der, a hostile government are reasonable and fair and rather than worry about whether the rate should change at all I think we should spend more time ensuring that the outcome will treat all grains fairly. Fin ally, gentlemen, I have my reservations about your motives for conducting these hearings in the first place, simply because transportation of grain does not come under provincial jurisdiction.

Despite the fact that this subject does not concern that many Manitobans you have held seven hearings. Earlier this year, there were hearings on Assessment Review, that is the Weir Report. This subject concerns all Manitobans and yet there were only four hearings scheduled and a fifth was finally arranged after considerable lobbying. This subject falls within the jurisdiction of the Provincial Government, has considerable tax-saving implications for me. Even though the last hearing was on February 8, 1983, the Standing Committee has not met to prepare its report for conside ration by the Legislature.

In conclusion , I trust tha t you will give serious consideration to my concerns. MR. CHAIRMAN: Thank you, Mr . Alexand er. Any questions for Mr. Alexander from members of the committee? Mr. Uskiw. HON. S. USKIW: Yes, Mr. Alexander, I wonder if you would clarify for us whether it is that your position would be that you would prefer a totally free market in transportation? MR. D. ALEXANDER: As I understand it, Mr.

Uskiw, the Federal Government is going to set up a review agency which will review freight rates from time to time and, as I see it, that's no different than our Public Utilities Board in Manitoba which reviews rate increases that are asked for by the Telephone, the Natural Gas people and so on. HON. S. USKIW: You're not making a case for the farmer paying his own transportation costs? MR. D.

ALEXANDER: Well, as I said, I really didn't see all that much wrong with the Grain Transportation Initia tive as proposed by the Federal Government in which they are going to cough up a subsidy of $65 1 million and from then on we share the inflationary costs between the producer and the Federal Government. HON. S. USKIW: Are you aware as to the total commitment of dollars that will flow to CN and CP Rail over the decade ahead under that proposal? 279 MR. D.

ALEXANDER: Well, it's some billions of dolla rs which are necessary to improve the mountain sections of the railways, otherwise we are going to have a fantastic tie-up in traffic. HON. S. USKIW: Are you aware that the figure is in excess of $13 billion of revenue based on the new regime? MR. D. ALEXANDER: lt's fairly high. HON. S. USKIW: That is accurate. The additional benefit is some $9.4 billion over Crow benefit to the railways. So they will have an additional revenue of $9.4 billion. Are you aware that the Federal Government is going to pick up $5.4 billion in direct subsidies? · MR. D.

ALEXANDER: Wel l, agai n, as far as I'm concerned, the money is necessary to go through the mountains and when we build a road out in the wild and willy prairies here, I think we're talking a million dollars a mile or maybe even in excess of it now. Now, to build a railway through the mountains, I have no idea what it costs them a mile and then the repair costs, particularly on curves in the mountains, it's my understanding every 18 months the rails on the curves have to be removed and replaced and this is one of the problems if we only have a single track. HON. S.

USKIW: Well, it appears that the railw ays are going to be spending about $9.5 billion in Western

Monday, 25 April, 1983 Canada over the next decade in new construction activity to upgrade their railway system of which the Government of Canada is going to put up 5.4 billion, the producers are being asked to put up 4 billion. So, you've got the total sum of the CN and CP capital investment over the next decade picked up by the Government of Canada, which is the taxpayers and the farmers. through a new rate regime.

Are you aware that of the increased tonna ges for which this is all being done, that grain represents only 16 percent of increased tonna ge at the most optomistic projection of increased shipments to the west coast? MR. D. ALEXANDER: Well, there's no doubt that there's going to be a lot of coal and potash shipped out of the mountain areas as well. But if there was an increase in traffic on the roads in Manitoba, would you make that in crease in traffic pay additional, or would you spread it out evenly amongst them all? HON. S.

USKIW: Well, I'm raising the question of you, sir, whether or not you think it makes sense for the farmers and the Government of Canada to put up 100 percent of the capital cost of upgrading the railway system. MR. D. ALEXANDER: Well, Mr. Uskiw, my position is, I think, quite simple and clear. I'm dying somewhat the same way Mc Ewan is, by overhead costs which I think are unnecessary if the grain were to move. Now, whether 1 pay it to the bank and get nothing for it or pay it to the railways and get something for it, I think is a desirable move as far as I'm concerned. HON. S.

USKIW: Do you feel it's reasonable to ask the average individual who has an earned income based on his or her labour, to put forward that substantive a subsidy towards rail upgrading in Western Canada? In other words, the income tax system is going to have to pay for it. Do you think that's a fair imposition of costs of transportion on non-users of the system? MR. D.

ALEXANDER: Well, I am of the same opinion as the first speaker up here and we never got together on our briefs, so I didn' t know what he was saying until today, but if we'd have wrestled with it or solved the problem back in '52 we wouldn't be faced with this dilemma today. Now, the way of solving it today may be undesirable but it's got to be remembered that all the people in Canada are going to benefit and if the taxpayers have to put in some money, well, fine and dandy. HON. S. USKIW: Okay, let me ask you the last question, well, hopefully the last one.

Why not then from your perspective, sir, if you believe that there is a need for revision, why not allow the marketplace to determine the rate without the benefit of taxpayers' support? MR. D. ALEXANDER: And so everything would be . HON. S. USKIW: Wide open. MR. D. ALEXANDER: . . . wide open. HON. S. USKIW: Yes. 280 MR. D. ALEXANDER: Well, why should we put the railways in this position when the telephone system or the hydro system or the natural gas system doesn't have to work under those conditions? HON. S. USKIW: Well, I'm not certain what it is you are deriving from my question. MR. D.

ALEXANDER: All I'm saying is, why should we pick out the railways and. make them the goats? HON. S. USKIW: My question was, why not let them be free and charge whatever they want? MR. D. ALEXANDER: Well, I think if that were the case the majority of farmers would cry foul. HON. S. USKIW: I thought we'd get to this point. I've got my answer. Thank you. MR. D. ALEXANDER: Just as they're crying foul now, of course. MR. CHAIRMAN: Further questions? Mr. Adam. HON. A. ADAM: On your seco nd la st page, Mr. Alexander, you questioned the motives of this committee coming out to talk to farmers.

Could you explain why you oppose a committee that was appointed by the Legislature to come out and get the views of farmers throughout Manitoba? What do you find wrong with that process in a democratic society? MR. D. ALEXANDER: Well, we spent a lot of time arguing about the Constitution and it gives certain rights to the feds and certain rights to the provincial people and certain rights to the municipal people. lt is my understanding grain transportation does not come under provincial jurisdiction. HON. A. ADAM: lt may be true that transportation does come under federal jurisdiction.

Certainly, the results that could happen because of this change may transfer substantial costs onto the provincial coffers to maintain our grid road system in the Province of Manitoba, but that still doesn't answer my question as the motives. You seem to question the sinc erity or the integrity of your elected people to come out and outreach and talk to farmers. MR. D. ALEXANDER: Well, I think, Mr. Adam, it's fairly evident that in an area where you have no jurisdiction . . .

My biggest concern is that there are so many different people trying to make light of this issue and there are so many different conflicting reports, that all we're doing is adding fuel to the fire. HON. A. ADAM: Mr. Chairman, it's back to my first question to you. In view of the fact that the studies that have been made by the provincial Department of Transportation on the impact of the changes to the Crow rate to Manitoba farmers, to the road system and so on, do you not feel that it would be irresponsible if we did not provide information to the public of what the impact would be? I I

Monday, 25 April, 1983 For in stance, the Province of Saskatchewan has mounted a massive advertising campaign in opposition to the advertising that was sent out by the federal people - I believe they're spending $700,000 or $800,000 - on trying to lobby for the Pepin package. Do you not feel that in view of the fact that Saskatchewan has passed a unanimous resolution in the House opposing any change, do you not think that it would be irresponsible if Manitoba just sat back and did nothing? MR. D. ALEXANDER: Mr. Adam, to answer this in a nutshell, I think there's too much politics getting involved in it. MR.

CHAIRMAN: Further questions? Mr. Adam. HON. A. ADAM: You also mentioned something about the Weir Committee, which I am involved in since it comes under my department. You seem to criticize the fact that there were only four or five meetings. Are you aware that the opposition were opposed to having any hearings, and that most of the municipalities wanted us to proceed . . MR. CHAIRMAN: Order please. HON. A. ADAM: Well, Mr. Chairman, on a point of order, this is in the brief. it's an attack on the Mini ster who is in charge of hearings and it's in the brief.

I think the Min ister has the right to respond. lt shouldn't have been in the brief. MR. CHAIRMAN: I would appreciate it, Mr. Min ister, if your response was short and to the point so we can carry on the Western Transportation In itiative. Please proceed. HON. A. ADAM: Well, Mr.

Chairman, if it wasn't in the brief I wouldn't have raised it, but the fact is that most of the municipalities, when we received the Weir Report, wanted us to implement them without any review, and that goes for the official opposition, members who are sitting on the other side of this committee at the moment, and I think I kind of resent that. MR. D. ORCHARD: Was that a question, Mr. Chairman? MR. CHAIRMAN: No, I think that was a statement. Questions. Mr. Bucklaschuk. HON. J. BUCKLASCHUK: Okay, I will refer that to particular line, too.

I have my reservations about your motives for conducting these hearings in the first place. I would gather then, Mr. Alexander, that you would agree with the Member for Pembina who is quoted in Hansard as referring to these as being "silly little meetings." MR. CHAIRMAN: Mr. Alexander. MR. D. ALEXANDER: So rry, Mr. Bucklaschuk, I don't get Hansard. HON. J. BUCKLASCHUK: That is the exact quotation from Hansard. I just wanted to know whether you agree with that viewpoint? 281 MR. D. ORCHARD: What page is that on, John? HON. A. ADAM: We can cite you

chapter and verse. MR. CHAIRMAN: Question. Is there a question, Mr. Bucklaschuk? HON. J. BUCKLASCHUK: I wanted to know if there was agreement with that viewpoint. MR. D. ALEXANDER: I said I didn't agree with the motives that I suspect are for conducting these hearings. MR. CHAIRMAN: Further questions? Mr. Uskiw. HON. S. USKIW: Yes, just on that point, Mr. Alexander, what motives do you see in these hearings? MR. D. ALEXANDER: Well, as you're readily aware, Mr. Uskiw, there's two schools of thought; one that it should be changed, and one that it shouldn't be changed.

Political parties have aligned themselves on one side of the fence and on the other. My concern is that we're getting more and more confusion into this issue than we're getting light into it. As for the matter of having a referendum, there's no doubt in my mind that it would be resoundly defeated, but it would be defeated mor e on emotion and misi nformation than on fact. HON. S.

USKIW: Yes, I'm somewhat intrigued by that ob servat ion of yours, sir , because, both in Saskatchewan and in Manitoba, all the legislators that have been elected to those two Assemblies have voted unanimously for the resolution to deal with this question and, indeed, to discuss the question with the public. The Saskatchewan Government is putting forward a much greater effort on this issue by way of expense and representation than indeed we are.

That's to be recognized, given that they are the No. 1 grain producer on the prairies but, notwithstan ding that, I don't think that I sensed any partisanship on his issue to date, apart from the fact that parties have their position; but our Legislature has unanimously endorsed our Resolve. I raise the question with you, again, how do you look at this as a partisan exercise when, in fact, it had the unanimous support of the Legislature? MR. D. ALEXANDER: Well, again, let's put it this way, it's pretty hard to come on one side or the other of an issue as thorny as this and not lose votes. HON. S.

USKIW: No doubt this issue is a very political issue, and we recognize that, but I just wanted you to know that this one, this exercise, was endorsed by both sides of the Manitoba Legislature. MR. D. ALEXANDER: I realize that. HON. S. USKIW: I would like to ask you one other question and that is when was the CPR, or the railway system in Canada, not a political issue in your memory? MR. D. ALEXANDER: That's one of the problems in this country, we seem to turn every issue into a political

Monday, 25 April, 1983 one, rather than getting a fair and proper settlement we tend to get band aid treatments. Band aid treatments tend to make problems worse instead of better. HON. S. USKIW: Do you believe that because the Government of Canada in the late 1800s politicized the building of a railway from coast-to-coast, that that was harmful to the formation of Canada as we know it today? MR. D. ALEXANDER: If, as I stated in my brief, that hadn't been done in 1885 we probably wouldn't exist as Canada as we know it today. HON. S.

USKIW: Doesn't that then conclude, in your mind, that it was indeed a necessary political process, in order to put this country together, and that is, the building of the railroad was part of that process. MR. D. ALEXANDER: lt certainly was because it was the only feasible means of transportation at that time across :and. HON. S. USKIW: Right. MR. D. ALEXANDER: And that, in effect, is why the Crow rates were instituted because it was a monopoly situation which is not the case anymore. MR. CHAIRMAN: Any further questions for Mr. Alexander? Mr. Gour lay. MR. D. GOURLAY: Mr.

Alexander, do you feel that this comm ittee could have had some other th rust at attacking this Pepin proposal, rather than the avenue we chose, to come to rural Manitoba? MR. D. ALEXANDER: Well, again, my big concern is it doesn't matter what you pick up you seem to get a little different story every time, and that is what is making it confusing for everybody. I think it would have been better if the Legislature had unanim ously decided to come out with a particlar thrust. MR. CHAIRMAN: Further questions? Mr. Bucklaschuk. HON. J.

BUCKLASCHUK: I want to get back to the motives, I think it is very important when the integrity of this whole exercise is being questioned. Mr. Alexander you had ind icated that you feel that, as a result of these meetings, there is more and more confusion. I just want to ask, how knowledgeable are you about the Pepin plan and its proposal to bring in $17 5 million of agricultural development in itiatives? MR. D. ALEXANDER: Well, probably not as familiar as I should be, but I am speaking of the Crow rate from my point of view. HON. J.

BUCKLASCHUK: Okay, that's fair enough, but what I wanted to elicit from you was some response as to whether or not you had heard that there was to be this $17 5 million package as part the whole revision of the freight rates, as an incentive to develop or diversify the agricultural indus try? 282 MR. D. ALEXANDER: Yes, I realize that was there. HON. J. BUCKLASCHUK: And would you hope that the greater part of that $175 million would be spent in Western Canada, who is going to be affected most severely by the changes? MR. D. ALEXANDER: Well, I would certainly hope so, yes. HON. J.

BUCKLASCHUK: Okay, I think this is where the confusion comes in. I believe that that is the impression that Mr. Pepin would like to have left with us, but I have on a number of occasions pointed to an

article in the Canadian Poultryman, a two-page

article where 149.4 million of that 175 is identified as going into Quebec. Now, who is creating the confusion? MR. D. ALEXANDER: That's what I'm saying, and even the feds are guilty of this, as well. HON. J. BUCKLASCHUK: I'm sorry I missed that. MR. D. ALEXANDER: I said, even the feds are guilty of creating confusion, as well. HON. J. BUCKLASCHUK: Would you not think that one of the purposes of the meeting, such as we are having right now, is to hear differing viewpoints and to try to come out with a clear understanding of what the issue is all about? MR. D.

ALEXANDER: Well, you've only heard three briefs so far, and two are on one side and one is on the other side, and they are both very far apart. HON. J. BUCKLASCHUK: That's true, but we've heard over 50 so far in the last six or seven meetings. Do you not feel that we have a better idea of how farmers feel about the issue? MR. D. ALEXANDER: No, I think you must have known what the feeling was before you ever started. MR. CHAIRMAN: Further questions for Mr. Alexander? Mr. Plohman. HON. J. PLOHMAN: Mr. Chairman, Mr.

Alexander mentioned that despite the fact that this subject does not concern that many Manitobans - you have held seven hearings, he said - I wonder if he would like to expand on that a bit. I'd just like to know whether you actually bel ieve that it doesn't conc ern many Manitobans. MR. D. ALEXANDER: There are many Manitobans that certainly aren't aware of what the Crow rate is, namely, the people in urban centres. Probably the Crow rate has a lot more effect than those people realize.

But what I was trying to draw the parallel here was with the Assessment Review Hearings, and all the people of Manitoba were involved in that and there were only four scheduled and there was a fifth one arranged,

whereas in this particular one, there were seven arranged to start off with. I

Monday, 25 April, 1983 HON. J. PLOHMAN: Dealing with this topic though, you said that it does not concern that many Manitobans and that troubled me, because I believe and I think it's commonly held that the farm community and the agricultural sector is very important to our economy and concerns every Manitoban. So I would like to ask you whether you feel that it's not very important or do you feel that it is not going to adversely affect, to a great extent, the agriculture community, rural Manitoba, if produc ers are paying six ti mes as much for transportation of their grain within the next seven years?

Do you feel that is not something that we should be too concerned about, because you've actually said you've endorsed, by and large, the Pepin proposal? MR. D. ALEXANDER: How do you come up with the figure six times in seven years? HON. J. PLOHMAN: By 1990, it's largely agreed, Mr. Chairman, that five to six times the Crow is what's in the Pepin proposal, and if it isn't, then members can give their interpr etation . That is the

interpretation that I've received as to what the Pepin proposal will result in for the farmers of Manitoba by 1990-9 1. MR. D. ALEXANDER: Mr. Chairman, that's my precise point, as far as this confusion bit. Certainly we're going to be paying six times or whatever in seven years, but everybody forgets the subsidy which the Federal Government is coming up with, and as a result we'll probably actually be paying only very little more than we are paying now, only the inflationary costs. If governments keep their act together, there won't be any inflation ary costs. HON. J.

PLOHMAN: So then you're not too concerned about paying that extra amount by 1990? MR. D. ALEXANDER: Most of it, Mr. Plohman, is going to be government subsidy to me. HON. J. PLOHMAN: Most of it, Mr. Chairman, will not be the government subsidies by that time. I just want to get the impression as to how you feel it will affect rural commun ities, rural Manitoba, and you're saying it will not have a terribly devastating or negative effect on rural Manitoba and that we will, in a sense, benefit. You would agree then with Pepin that we would benefit rather than be hurt by this. MR. D.

ALEXANDER: Well, as I said in my brief, we have people end-running the system now, and you had one presenter who admitted that he was trucking flax to Minn eapolis and that's certainly end-running the orderly marketing system. HON. J. PLOHMAN: Mr. Chairman, the question was not answered but I'll leave it at that. I feel that the presenter is largely agreeing or feeling, and that's contrary to my belief, that this will not negatively affect the rural community and the farming communi ty of Manitoba to any great extent. MR. D. ALEXANDER: Mr.

Plohman, I ind icated in my brief that the interest charges and operating costs were 283 $6. 10 an acre for wheat. Now, that's a figure from the Department of Agricultur e; that's for this year. In conversation with my banker, he says that's not high enough, and I'm saying that if we can get rid of the grain quicker, then I won't find it necessary to borrow that money for my operating loan for as long a period and hence cut down on my int erest costs. Therefore, I feel it's better to pay the railways for something than the banks for nothing. HON. J.

PLOHMAN: Then you assume and you associate the extra costs that would be incur red by the farmers with better service and you're saying that is synonymous? MR. D. ALEXANDER: Yes, I think we're going to exchange one for the other. HON. J. PLOHMAN: And you have faith that will indeed happen? MR. D. ALEXANDER: Yes, I do. MR. CHAIRMAN: Further questions? Mr. Orchard. MR. D. ORCHARD: Mr. Chairman, there seems to have been some concern by mem bers oppo site about comments on the motives of these hearings versus the Weir Report. Mr. Alexander, just a brief question.

Would it be fair to summarize your concern being that the review of assessment had a taxation, an extra cost implication, on probably 200,000 Manitoba homeowners and 30,000 farmers, hence really affected all Manitobans.

whereas the Crow rate per se, as an additional cost, has a potential effect only on some 30,000 farmers? MR. D. ALEXANDER: That was the gist of what I was trying to put forth in my presentation. MR. D. ORCHARD: Thank you. MR. CHAIRMAN: Further questions by members of the committee? Seeing none, may I ask the committee's leave to ask a couple of questions again? Mr. Alexander, are you aware that Sections 91 and 92 of The British North America Act, which are now part of the Constitution of this countr y, delegate responsibility for agricultural matters jointly to the provinces and the Federai .G overnment? MR. D.

ALEXANDER: Yes, but I bel ieve grain transportation is a federal responsibil ity, is it not? MR. CHAIRMAN: Agreed. Would you also not agree that having a responsibility for agriculture means that provincial governments would then also have a vested int erest in grain transportation matters, since it is part of their join t jur isdiction to be re sponsible for agriculture? MR. D. ALEXANDER: I suppose, but then on the other hand, I, as a conservationist, have a grave concern for

Monday, 25 April, 1983 the soil base and I see the present quota system, which is being used to ration the shipping space on the railway, as devastating to the soil base. MR. CHAIRMAN: I wasn't concerned about that particular angle. I appreciate your concern and I share that concern. MR. D. ALEXANDER: But that's where I'm coming from. MR. CHAIRMAN: My concern was that this committee, in your opinion, seemed to lack jurisdiction in this matter and that gave me . . . MR. D. ALEXANDER: Well, it's pretty fuzzy. MR. CHAIRMAN: My second question relates to the same issue.

Would you not consider the holding of public meetings throughout the province as an opportunity for the people of the province not only to make presentations, but to become better informed on this issue? MR. D. ALEXANDER: I'm certain that the people who are going to go away from here today and I don't think my talk will have swayed anybody or that Bill Spencer's will have swayed anybody either, so how do we come out ahead? MR. CHAIRMAN: Are there any further questions by membe rs of the comm ittee? Seeing none, Mr. Alexander, thank you very much for your presentation. MR. D. ALEXANDER: Thank you, Mr. Chairman.

MR. CHAIRMAN: The next person on our list is Mr. Bill Strath, Manitoba Pool Elevators. Mr. Strath. Plea